Tax efficient account wrappers in the UK

Every business that's launching new investing products in the UK needs to think about the account wrappers its going to offer investors. The most basic is usually the GIA (General Investing Account) or the ISA (Individual Savings Account).

WealthKernel is an HRMC ISA Manager, and we support the following wrappers in the UK. This means your business can offer investors flexible investing products however they want to invest, all over API.

Individual Savings Account (ISA)

A Stocks and Shares ISA allowing investment into a range of different products. We are an authorised HMRC ISA Manager.

General Investing Account (GIA)

A General Investing Account is a simple account where investments are held outside of tax wrappers such as Pensions & ISAs.

Junior ISA (JISA)

An investment account for an eligible child, that can be contributed to by family and friends, managed in accordance with the ISA regulations with a parental contact.

Self Invested Pension Plan (SIPP)

A SIPP gives individuals the freedom to allocate their pension assets in a wide range of investments approved by HMRC.

To learn more, contact our team and we can discuss your requirements, otherwise to learn more about each wrapper read on.

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Stocks & Shares ISAs

Also known as Investment ISAs, these are tax-efficient investment accounts allowing you to invest in stocks, shares, funds and bonds. You won’t have to pay any income tax or capital gains tax on the money earned through these investments. 

9 in 10 retail pounds invested in the UK is via the ISA wrapper, so offering access to these is usually vital to any investing offering. To open an Investment ISA, you must be a UK resident and over 18 years of age. The annual ISA allowance for 2022-23 tax year is £20,000.


Junior Individual Savings Accounts (JISAs) are long-term, tax-free savings accounts for children that parents and relatives can save or gift money into. To open a Junior ISA, a child must be less than 18 years old and must not have a Child Trust Fund. Unlike an ISA, the savings and investments in a Junior ISA can’t be withdrawn until the child reaches 18.

When the child turns 18, they take over the management of the account at which point the JISA becomes an Individual Savings Account (ISA). The British Government has raised the annual tax-free allowance from £4,500 to £9,000 from April 2021.


SIPP or a self-invested personal pension plan is a pension wrapper that allows you to actively manage how your pension pot is invested. SIPP gives you the freedom to manage your investments yourself with a wide range of funds to choose from.

Investors can enjoy the benefits of the SIPP wrapper that protects their investments from tax, via a contribution from the HMRC.

The tax authorities (HMRC) top-up personal contributions to your SIPP at the basic rate of tax. For example, if you were to deposit an £80 contribution your SIPP would receive an additional £20 from HMRC.

Cash ISAs

These are savings accounts that allow you to earn interest on your savings without paying tax. With Cash ISAs, basic rate taxpayers can earn up to £1,000 in tax-free savings interest per year. The annual ISA allowance for the 2022-23 tax year is £20,000 - you can split your savings across different types of ISAs or save all in one.

To open a cash ISA, you must be a UK resident and over 16 years of age.

Lifetime ISAs (LISAs)

Lifetime ISAs are long-term tax-efficient savings accounts. LISA holders are entitled to a government bonus of 25% of the amount they put in, up to a maximum of £1,000 a year.

To open a Lifetime ISA, you must be either a UK resident aged between 18 - 40 years old and must make your first payment before you are 40. You can put in up to £4,000 each year until you’re 50. You can continue to pay into the LISA until you’re 50 and withdraw the amount for free once you are 60 years old and above. Contributions to a LISA account count towards your annual ISA limit. This is £20,000 for the 2022 to 2023 tax year.

European Account Wrappers

Investing account wrappers vary widely across Europe and the EU. There is no one overarching system, but there are common themes running through all jurisdictions, many of which are similar to wrappers offered in the UK and the USA.

The World Bank’s Five Pillar Framework outlines the necessary elements for a modern pension system, and options that regulators should consider when building theirs. Many economically reforming countries have adopted the framework in Central and Eastern Europe.

Out of the five pillars, Pillar 2 represents the system where recipients and employers contribute to a privately funded system, including pension plans and defined-contribution accounts, like the 401k plan in the US.

Pillar 3 includes voluntary private contributed accounts such as investment savings accounts (ISAs in the UK or IRAs in the US), insurance etc.

Riester Pension

The term “Riester pension” includes products ranging from insurance policies, savings plans, unit trust agreements and home loan to savings contracts.

The saver invests a certain amount each month and can withdraw capital after retirement. Low-income savers and families with children benefit from the 'Riester' allowances while higher earners benefit from the tax advantages. Under this account, contributions of up to €2,100 can be claimed as a special expense in the income tax return.


Designed for the self-employed and freelancers who are not covered by statutory pension insurance, Rürup'- pension benefits are taxed in the same way as the statutory pension, but initially only partially.

The taxable portion depends on the year in which the pension commences and is fixed for life as a fixed amount. It rises continuously with later years of retirement.

Piano Individuale di Risparmio (PIR)

PIR offers tax incentives to savers investing in small and medium sized Italian companies. It can be sold as mutual funds, discretionary accounts, life policies or security deposit accounts and carries full exemption from 26% income tax if savers stay invested for at least five years.

PIR plans are aimed at retail investors resident in Italy who can invest a maximum of €30,000 per year and up to €150,000 over five years.

At least 70% of assets must be invested in financial instruments (equities or bonds) issued by Italian and/or foreign companies (EU and EEA) permanently established in Italy under the domestic fiscal regime. Of this 70%, at least 30% (or 21% of total investable assets) must be in Italian small and mid caps not included in the main index (FTSE MIB).

Plan d’Epargne en Actions (PEA)

Created in 1992, PEA is a tax-efficient investment wrapper for residents, allowing French investors to buy and sell European securities with preferential conditions.

It is considered as a simplified stock savings plan because a PEA account contains both a securities account and a cash account. The cash account is debited when a security is purchased, and credited when a security is sold or a company pays dividends.

Livret A

Established in 1818, the product acts as a savings account for French citizens and residents, and the annual returns are not taxed. As of 2015, only one account may be held by an individual, with an amount from €10 to €22,950.

European ISA (Spanish Compliant Bond)

Spanish compliant investment bonds are tax-efficient, unit-linked platforms for EU regulated funds such as collective investment schemes and unit trusts.

To avail tax benefits on the above, the resident must invest in a tax-saving life insurance bond that contains an element of ‘risk’ and pays out life insurance over and above the plan (around 101%).

Investeringssparkonto (ISK)

Established in 2012, ISK makes it easier to trade in financial instruments. Unlike an ordinary securities account, you pay no capital gains tax on your transactions.

It is a tax wrapper in which gains are not taxed. Instead, a tax is taken on returns each year, calculated on the market value of the securities in the account multiplied by a standardised interest rate.

Investing Account Wrappers in the USA

In the USA, investors have access to state and federal investing account types, with some more well known than others (especially to foreigners, who've likely heard of 401Ks, but probably not the 529 plan).

Many accounts are similar to those available to European investors, but with private healthcare far more common stateside, plans like the HSA have no European equivalent. Nonetheless, the 401k plan and Roth IRAs still dominate.

Read on to learn more about the tax-efficient investing accounts available to American citizens.


Individual Retirement Accounts are a long-term tax-efficient investment strategy that can help you save towards your retirement. Your money can grow on a tax-deferred and tax-free basis depending on the IRAs.

Different types of IRAs include traditional IRAs, Roth IRAs, SIMPLE IRAs and SEP IRAs. You can withdraw your money in an IRA only after you have reached 59 years of age and above. In case of premature withdrawal, a 10% tax penalty is levied.


Like IRA, 401k is tax saving retirement plan offered by American employers. Under this plan, employees agree to have a percentage of their salary directly invested into the account, with their employers matching part or all of the contribution. In addition, employees get a tax break on the money invested. 

In traditional 401k, money gets deducted from the employee’s income before tax, while in Roth 401k, money gets deducted from the employee’s after-tax income. The earnings in traditional 401k are tax-deferred and tax-free in Roth 401k.

Similar to the IRA, earnings in 401k can only be withdrawn by employees older than 59 years of age. But during the pandemic in 2020, withdrawal rules were relaxed for 401k.


FSA or a Flexible Spending Account is a tax-advantaged savings account that allows employees to reimburse their medical and dental fees.

Like the 401k, it allows you to invest a part of your income in paying for health-related expenses. Employers can contribute to the employees’ FSA. The income contributed to the account is exempted from income tax.


HSA or a Health Savings Account is tax-efficient savings account for the individuals covered under the High Deductible Health Plans (HDHP). The contributions are made either by an individual (employed/ unemployed) or their employers to help the individuals pay for their medical expenses.

To qualify for an HSA, the individual must be covered under the HDHP and have no other health plan. The amount can be withdrawn only in the case of a qualified medical expense, attracting tax and a 20% penalty if drawn for other uses.

529 Plan

A 529 Plan is a tax-efficient savings plan that aims to encourage savings for future educational expenses. The 529 Plans are sponsored by the states and educational institutions and form a part of Section 529 of the Internal Revenue Code.

Earnings from the 529 Plan, if they are withdrawn for qualified higher education expenses, are not subjected to federal income tax and investors can also avail of deduced state income tax with certain restrictions.